The Federal Reserve raised its benchmark rate by 0.25 percentage point to 3.75%-4.00% on the 16th, its first increase in three years, and indicated that another hike before year-end remains possible. In a report on the 17th, IBK Investment & Securities analyst Byun Jun-ho said the move reflected renewed inflation concerns as oil prices rose amid resurfacing Middle East risk. The Fed’s dot plot showed 16 of 18 policymakers forecasting a year-end rate above the current level, including 12 expecting 4.00%-4.25% and four expecting 4.25%-4.50%. Byun said December appeared more likely than October for the next move, while the outlook for next year would depend on whether Middle East risk escalates or eases. The report said the increase was not accompanied by signs of a deteriorating U.S. economy: the Fed raised its growth forecasts for this year and next to 2.3% and 2.4%, respectively, while lowering both unemployment forecasts to 4.1%. For Korean stocks, Byun said the won’s weakness against the dollar and the resulting foreign-investor selling pressure deserved more attention than the rate increase itself. With Korean monetary policy expected to remain on hold while the Fed may tighten further, the widening rate gap could add upward pressure on the dollar. Foreign selling appears to have resumed since the 10th, when the exchange rate reached a short-term low.